Is Bidenomics More Than Catch-Up?
The Biden administration's promises to "think big" and rebuild the country seem like a major historical departure from decades of policy orthodoxy. And yet, insofar as its agenda will merely help the United States catch up to other advanced economies, its main components amount to necessary but insufficient reforms.
PARIS – “Let us think big,” exhorted US Secretary of the Treasury Janet Yellen in May. “Let’s build something that lasts for generations.”
Such is the transformative rhetoric behind President Joe Biden’s economic-policy agenda. But what, exactly, will be built, and how will America be transformed? The answer is bound to be as much political as economic, because Biden has set out to respond to the anger that led many workers to vote for his predecessor, Donald Trump.
In recent weeks, much of the US policy debate has focused on the size of the Biden administration’s $1.9 trillion American Rescue Plan, with critics arguing that it represents excessive stimulus in an economy already on the mend from the recession and whose pre-pandemic state was very close to full employment. The rescue plan, however, is merely the first plank of a three-part domestic agenda that includes the $2.3 trillion American Jobs Plan and the $1.8 trillion American Families Plan, both of which aim to bring about more comprehensive long-term change.